Can I Retire Calculator

Can I Retire Calculator

Estimate your retirement readiness based on your savings, contributions, and desired lifestyle.

function calculateRetirement() { var currentAge = parseFloat(document.getElementById('currentAge').value); var retirementAge = parseFloat(document.getElementById('retirementAge').value); var currentSavings = parseFloat(document.getElementById('currentSavings').value); var annualSavings = parseFloat(document.getElementById('annualSavings').value); var desiredExpenses = parseFloat(document.getElementById('desiredExpenses').value); var investmentReturn = parseFloat(document.getElementById('investmentReturn').value) / 100; var inflationRate = parseFloat(document.getElementById('inflationRate').value) / 100; var resultDiv = document.getElementById('retirementResult'); resultDiv.innerHTML = "; if (isNaN(currentAge) || isNaN(retirementAge) || isNaN(currentSavings) || isNaN(annualSavings) || isNaN(desiredExpenses) || isNaN(investmentReturn) || isNaN(inflationRate) || currentAge <= 0 || retirementAge <= 0 || currentSavings < 0 || annualSavings < 0 || desiredExpenses <= 0 || investmentReturn < 0 || inflationRate < 0) { resultDiv.innerHTML = 'Please enter valid positive numbers for all fields.'; return; } if (retirementAge 0) { futureValueAnnualSavings = annualSavings * ((Math.pow(1 + investmentReturn, yearsToRetirement) – 1) / investmentReturn); } else { futureValueAnnualSavings = annualSavings * yearsToRetirement; } var projectedPortfolioAtRetirement = futureValueCurrentSavings + futureValueAnnualSavings; // Phase 2: Decumulation (Post-Retirement) var futureDesiredExpenses = desiredExpenses * Math.pow(1 + inflationRate, yearsToRetirement); // Using the 4% rule for required portfolio size var safeWithdrawalRate = 0.04; var requiredPortfolioForExpenses = futureDesiredExpenses / safeWithdrawalRate; var resultHTML = '

Retirement Projection:

'; resultHTML += 'Years until retirement: ' + yearsToRetirement + ' years'; resultHTML += 'Projected Portfolio at Retirement: $' + projectedPortfolioAtRetirement.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}) + ''; resultHTML += 'Desired Annual Expenses (in future dollars): $' + futureDesiredExpenses.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}) + ''; resultHTML += 'Estimated Portfolio Needed (based on 4% withdrawal rule): $' + requiredPortfolioForExpenses.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}) + ''; if (projectedPortfolioAtRetirement >= requiredPortfolioForExpenses) { resultHTML += 'Conclusion: You are on track to meet your retirement goals!'; var yearsLasting = calculateYearsPortfolioLasts(projectedPortfolioAtRetirement, futureDesiredExpenses, investmentReturn, inflationRate); resultHTML += 'Based on your projected portfolio, your funds could last approximately ' + yearsLasting + ' years.'; } else { var shortfall = requiredPortfolioForExpenses – projectedPortfolioAtRetirement; resultHTML += 'Conclusion: You may need to save more or adjust your retirement plans.'; resultHTML += 'You are projected to be short by approximately $' + shortfall.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}) + ' at retirement.'; var yearsLasting = calculateYearsPortfolioLasts(projectedPortfolioAtRetirement, futureDesiredExpenses, investmentReturn, inflationRate); resultHTML += 'Based on your projected portfolio, your funds might only last approximately ' + yearsLasting + ' years.'; } resultDiv.innerHTML = resultHTML; } function calculateYearsPortfolioLasts(initialPortfolio, annualWithdrawal, investmentRate, inflationRate) { var currentPortfolio = initialPortfolio; var currentWithdrawal = annualWithdrawal; var years = 0; var maxYears = 100; // Prevent infinite loops for very long-lasting portfolios // If the initial withdrawal is already more than the portfolio, it won't last a year. if (currentWithdrawal >= currentPortfolio * (1 + investmentRate)) { return 0; } while (currentPortfolio > 0 && years < maxYears) { currentPortfolio = currentPortfolio * (1 + investmentRate) – currentWithdrawal; currentWithdrawal = currentWithdrawal * (1 + inflationRate); years++; if (currentPortfolio = maxYears) { return "100+"; } return years; }

Understanding Your Retirement Readiness

Planning for retirement is one of the most critical financial goals. Our "Can I Retire Calculator" helps you get a clearer picture of whether your current savings and contributions are on track to support your desired lifestyle in retirement. This tool considers several key factors to project your future financial standing.

How the Calculator Works

The calculator operates in two main phases:

  1. Accumulation Phase: It projects how much your current retirement savings and your annual contributions will grow until your desired retirement age, based on your expected investment return.
  2. Decumulation Phase: It then estimates how much money you'll need at retirement to cover your desired annual expenses, adjusted for inflation, and compares this to your projected savings.

Key Inputs Explained:

  • Your Current Age: Your age today.
  • Desired Retirement Age: The age at which you plan to stop working and begin living off your savings.
  • Current Retirement Savings ($): The total amount you currently have saved in retirement accounts (e.g., 401k, IRA, personal investments).
  • Annual Savings Contribution ($): The amount you plan to save and invest each year until retirement.
  • Desired Annual Retirement Expenses ($): The amount of money you anticipate needing to cover your living costs annually once retired. This should be in today's dollars.
  • Expected Annual Investment Return (%): The average annual growth rate you expect your investments to achieve. A common historical average for a diversified portfolio might be 6-8%.
  • Expected Annual Inflation Rate (%): The rate at which the cost of goods and services is expected to increase each year. A typical long-term average is around 2-3%. This is crucial because your future expenses will be higher than today's.

The 4% Rule: A Common Guideline

Our calculator uses the "4% Rule" as a benchmark for estimating the required portfolio size. This rule suggests that you can safely withdraw 4% of your initial retirement portfolio balance each year, adjusting that dollar amount for inflation annually, and have a high probability of your money lasting for 30 years or more. For example, if you need $50,000 per year in retirement, you would aim for a portfolio of $1,250,000 ($50,000 / 0.04).

While a widely cited guideline, the 4% rule is a simplification. Actual safe withdrawal rates can vary based on market conditions, your specific portfolio, and your desired longevity of funds. However, it provides a useful starting point for planning.

Interpreting Your Results:

  • On Track: If your projected portfolio at retirement is greater than or equal to the estimated portfolio needed, you're in a good position. The calculator will also show you how many years your funds could last.
  • Need to Adjust: If your projected portfolio falls short, the calculator will highlight the shortfall. This indicates you might need to increase your annual savings, work longer, reduce your desired retirement expenses, or aim for a higher (but realistic) investment return.

Important Considerations:

This calculator provides an estimate and should not be considered professional financial advice. It does not account for:

  • Social Security or pension income.
  • Taxes on withdrawals or investment gains.
  • Healthcare costs, which can be significant in retirement.
  • Lump-sum expenses (e.g., buying a new car, home repairs).
  • Changes in investment returns or inflation rates over time.

For a comprehensive retirement plan, it's always recommended to consult with a qualified financial advisor.

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